<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-26190
AMERICAN ONCOLOGY RESOURCES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-1213501
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
16825 NORTHCHASE DRIVE, SUITE 1300
HOUSTON, TEXAS
77060
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(ZIP CODE)
(281) 873-2674
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
----- -----
AS OF MAY 9, 1997, 28,645,826 SHARES OF THE REGISTRANT'S COMMON STOCK WERE
OUTSTANDING.
<PAGE>
AMERICAN ONCOLOGY RESOURCES, INC.
FORM 10-Q
MARCH 31, 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
-------
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEET 3
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS 4
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 5
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 11
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 15
SIGNATURES 16
</TABLE>
-2-
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
AMERICAN ONCOLOGY RESOURCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
---------- ------------
ASSETS (unaudited)
<S> <C> <C>
Current assets:
Cash and equivalents................. $ 8,551 $ 3,429
Accounts receivable.................. 72,206 61,183
Prepaids and other current assets..... 5,500 5,775
Due from affiliated physician groups. 1,311 5,356
-------- --------
Total current assets............. 87,568 75,743
Property and equipment, net............. 21,063 18,943
Management service agreements, net...... 265,150 240,034
Other assets............................ 5,229 4,680
-------- --------
$379,010 $339,400
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of indebtedness... $ 5,180 $ 9,783
Accounts payable..................... 23,663 15,148
Due to affiliated physician groups... 1,796 616
Accrued compensation costs........... 1,589 1,806
Accrued interest payable............. 1,744 2,325
Income taxes payable................. 2,635 641
Other accrued liabilities............ 2,916 2,452
-------- --------
Total current liabilities............ 39,523 32,771
Deferred income taxes................... 3,883 3,068
Long-term indebtedness.................. 110,582 81,707
-------- --------
Total liabilities.................... 153,988 117,546
-------- --------
Stockholders' equity:
Preferred stock, $.01 par value,
1,000,000 shares authorized,
none issued and outstanding......
Common stock, $.01 par value,
60,000,000 shares authorized,
28,411,082 and 28,369,482 shares
issued and
27,531,056 and 27,371,422 shares
outstanding....................... 284 284
Additional paid-in capital........... 136,106 139,804
Common stock to be issued,
17,388,480 and 17,462,782 shares.... 63,382 61,225
Treasury stock, 880,026 and 998,060
shares.............................. (8,591) (8,530)
Retained earnings.................... 33,841 29,071
-------- --------
Total stockholders' equity........... 225,022 221,854
-------- --------
$379,010 $339,400
======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
-3-
<PAGE>
AMERICAN ONCOLOGY RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
1997 1996
--------- --------
<S> <C> <C>
Revenue................................ $70,396 $40,750
Operating expenses:
Pharmaceuticals and supplies......... 32,138 14,958
Practice compensation and benefits... 13,471 8,364
Other practice costs................. 7,690 5,028
General and administrative........... 4,171 2,869
Depreciation and amortization........ 3,037 1,902
------- -------
60,507 33,121
------- -------
Income from operations................. 9,889 7,629
Other income (expense):
Interest income...................... 102 549
Interest expense..................... (1,745) (1,006)
------- -------
Income before income taxes............. 8,246 7,172
Income taxes........................... 3,174 2,725
------- -------
Net income............................. $ 5,072 4,447
======= =======
Net income per share................... $ .11 $ $.09
======= =======
47,392 47,338
Shares used in per share calculations.. ======= =======
</TABLE>
The accompanying notes are an integral part of this statement.
-4-
<PAGE>
AMERICAN ONCOLOGY RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ADDITIONAL COMMON TREASURY
COMMON STOCK PAID-IN STOCK TO STOCK RETAINED
SHARES PAR VALUE CAPITAL BE ISSUED COST EARNINGS TOTAL
------ --------- ----------- ---------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996............ 28,369 $ 284 $139,804 $61,225 $ (8,530) $29,071 $221,854
Medical practice transactions-value of
700,732 shares to be issued............ 4,393 4,393
Purchase of 657,000 shares of Treasury
stock.................................. (6,418) (6,418)
Delivery of 775,034 shares of Common
Stock issued from treasury............. (3,819) (2,236) 6,357 (302)
Exercise of options to purchase
Common Stock.......................... 42 121 121
Net Income.............................. 5,072 5,072
----- ------ --------- -------- ---------- ------- --------
Balance at March 31, 1997............... 28,411 $ 284 $136,106 $63,382 $ (8,591) $33,841 $225,022
====== ====== ======== ======= ========== ======= ========
</TABLE>
The accompanying notes are an integral part of this statement.
-5-
<PAGE>
AMERICAN ONCOLOGY RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
1997 1996
--------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income........................... $ 5,072 $ 4,447
Noncash adjustments:
Depreciation and amortization.... 3,037 1,902
Deferred income taxes............ 815 379
Imputed interest on medical
practice transactions........... 113
Cash provided (used), net of effects
of medical practice
transactions, by changes in:
Accounts receivable.............. (8,942) (4,487)
Prepaids and other current assets 273 (1,559)
Other assets..................... (502) (39)
Accounts payable................. 8,452 (1,344)
Due from/to affiliated physician
groups.......................... 5,548 954
Income taxes payable............. 1,353 (1,865)
Other accrued liabilities........ (2,668) (17)
-------- --------
Net cash provided (used) by
operating activities................ 12,438 (1,516)
-------- --------
Cash flows from investing activities:
Net sales of short-term investments.. 23,887
Acquisition of property and equipment (2,825) (2,166)
Net payments in medical practice
transactions........................ (13,471) (19,351)
-------- --------
Net cash provided (used) by
investing activities................ (16,296) 2,370
-------- --------
Cash flows from financing activities:
Proceeds from credit facility........ 32,000
Repayment of credit facility......... (10,000)
Proceeds from other indebtedness..... 519
Repayment of other indebtedness...... (7,242) (15,411)
Purchase of Treasury Stock........... (6,418)
Net proceeds from issuance of Common
Stock............................... 121 218
-------- --------
Net cash provided (used) by
financing activities................ 8,980 (15,193)
-------- --------
Increase (decrease) in cash and
equivalents............................ 5,122 (14,339)
Cash and equivalents:
Beginning of period.................. 3,429 14,816
-------- --------
End of period........................ $ 8,551 $ 477
======== ========
Interest paid........................... $ 2,313 $ 1,305
Taxes paid.............................. 420 4,211
Noncash transactions:
Tax benefit from exercise of
non-qualified stock options......... 1,958
Value of Common Stock to be issued
in medical practice transactions.... 4,393 4,149
Delivery of Common Stock to be
issued in medical practice
transactions........................ 2,236
Debt issued in medical practice
transactions........................ 8,955 6,815
</TABLE>
The accompanying notes are an integral part of this statement.
-6-
<PAGE>
AMERICAN ONCOLOGY RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial reporting and in accordance with Form 10-Q and Rule 10.01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, the unaudited condensed
consolidated financial statements contained in this report reflect all
adjustments, which are normal and recurring in nature, considered necessary for
a fair presentation of the financial position and the results of operations for
the interim periods presented. The preparation of the Company's financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets, liabilities, revenues and expenses, as well as disclosures on contingent
assets and liabilities. Because of inherent uncertainties in this process,
actual future results could differ from those expected at the reporting date.
These unaudited condensed consolidated financial statements, footnote
disclosures and other information should be read in conjunction with the
financial statements and the notes thereto included in the Company's Form 10K
filed with the Securities and Exchange Commission on March 25, 1997.
NOTE 2 - MEDICAL SERVICE REVENUE
Medical service revenue for services to patients by the medical groups
affiliated with the Company is recorded when services are rendered based on
established or negotiated charges reduced by contractual adjustments and
allowances for doubtful accounts. Differences between estimated contractual
adjustments and final settlements are reported in the period when final
settlements are determined. Medical service revenue of the affiliated medical
groups is reduced by the contractual amounts retained by the medical groups to
arrive at the Company's revenue.
The following presents the amounts included in the determination of the
Company's revenue (in thousands):
<TABLE>
<CAPTION>
Three Months
Ended March 31,
1997 1996
-------- --------
<S> <C> <C>
Medical service revenue................. $92,137 $53,511
Amounts retained by medical practices... 21,741 12,761
------- -------
Revenue................................. $70,396 $40,750
======= =======
Management service agreements at end of
period................................. 35 25
</TABLE>
-7-
<PAGE>
AMERICAN ONCOLOGY RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 3 - MEDICAL PRACTICE TRANSACTIONS
During the first quarter of 1997, the Company, through wholly-owned
subsidiaries, acquired certain non-medical assets of, and amended long-term
management agreements to affiliate with, four medical oncology practices.
During the first quarter of 1996, the Company acquired certain non-medical
assets of, and entered into long-term management service agreements with, three
medical oncology practices. The transactions have been accounted for as asset
purchases. The following presents the aggregate consideration required to
complete those transactions (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
1997 1996
--------- ---------
<S> <C> <C>
Cash and transaction costs.............. $13,870 $19,351
Liabilities assumed..................... 2,212 967
Issuance of short-term and subordinated 8.955 6,815
notes..................................
Common Stock to be issued............... 4,393 4,149
------- -------
$29,430 $31,282
======= =======
</TABLE>
In conjunction with the medical practice transactions occurring in the first
quarter of 1996, the Company is contingently obligated to pay up to an
additional $2.6 million in future years, depending on the achievement of certain
financial objectives. Such liability, if any, will be recorded in the period in
which the outcome of the contingency becomes known. Any payment made will be
allocated to the long-term management services agreements and will not
immediately be charged to expense.
For transactions completed through March 31, 1997, the scheduled issuance of the
shares of Common Stock that the Company is committed to deliver over the passage
of the time are: 1,816,858 in 1997, 2,940,617 in 1998, 5,244,319 in 1999,
5,092,384 in 2000, 1,298,859 in 2001 and 995,443 thereafter. Although such
shares are not yet issued or outstanding, such shares are considered as
outstanding for per share calculations.
The accompanying unaudited condensed consolidated financial statements include
the results of operations derived from the management service agreements from
their respective effective dates. The following unaudited pro forma information
presents the results of operations assuming all 1997 and 1996 transactions were
consummated on January 1, 1996. Such pro forma information is based on the
historical financial information of the medical practices and does not include
operational or other changes which might have been effected pursuant to the
Company's management of the nonmedical aspects of such practices.
The pro forma information presented below is for illustrative information only
and is not necessarily indicative of results which would have been achieved or
results which may be achieved in the future (in thousands except share amounts):
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1996
------------- -------------
<S> <C> <C>
Revenue............... $71,961 $51,756
Net income............ 5,097 4,679
Net income per share.. 0.11 0.10
</TABLE>
NOTE 4- CAPITALIZATION
As part of entering into long-term management agreements with medical practices
described in Note 3, the Company has nonforfeitable commitments to issue shares
of Common Stock at specified future dates for no further consideration. Common
Stock to be issued is shown as a separate component in stockholders' equity and
the amounts, upon issuance of the shares, will be reclassified to par value and
additional paid-in capital.
-8-
<PAGE>
AMERICAN ONCOLOGY RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Effective May 8, 1997, the Company's stockholders approved an increase in the
number of shares of Common Stock authorized to be issued to 80,000,000 shares.
In addition, the Company's Key Employee Stock Option Plan ("Plan") was amended
to increase the number of shares available for grants under the Plan to 7% from
5% of the Company's outstanding Common Stock (includig shares to be issued at
future specified dates).
During the first quarter of 1997, options to purchase 436,050 shares of Common
Stock at $10.56 per share were granted under the Company's various stock option
plans, of which 242,500 were granted to executive officers and directors.
During the first quarter of 1997, options to purchase 41,600 shares of Common
Stock at $2.67 to $4.125 per share were exercised, of which 30,000 were
exercised by executive officers and directors. During the first quarter of
1997, options to purchase 42,624 shares of Common Stock were canceled. At March
31, 1997, there were options to purchase 5,170,394 shares of Common Stock
outstanding under the Company's various stock option plans at exercise prices of
$1.34 to $24.18 per share.
On August 13, 1996, the Board of Directors of the Company authorized the
repurchase of up to 3,000,000 shares of the Company's Common Stock in public or
private transactions. From November 1996 through January 1997, the Company
repurchased 1,767,500 shares of Common Stock at an average price of $8.96 to be
held as treasury stock. On March 3, 1997 and March 17, 1997, the Company issued
555,616 and 219,418 shares, respectively, from treasury stock to affiliated
physicians in connection with two 1995 medical practice transactions.
On May 16, 1996, the Board of Directors of the Company declared a two-for-one
stock split of the Company's Common Stock which was paid on June 10, 1996 to
stockholders of record on May 31, 1996. All references herein to the number of
shares and per share amounts have been adjusted to reflect the effect of the
split.
NOTE 5- INDEBTEDNESS
Indebtedness consists of the following (in thousands):
<TABLE>
<CAPTION>
MARCH 31, 1997 DECEMBER 31, 1996
--------------- ------------------
<S> <C> <C>
Short-term notes payable............. $ 4,219
Subordinate notes.................... $ 68,151 62,113
Credit facility...................... 45,000 23,000
Capital lease obligations and other.. 2,611 2,158
-------- -------
115,762 91,490
Less current maturities.............. (5,180) (9,783)
-------- -------
$110,582 $81,707
======== =======
</TABLE>
The Company has a loan agreement and revolving credit facility ("Credit
Facility") with First Union National Bank of North Carolina ("First Union")
individually and as Agent for seven additional lenders ("Lenders"), which was
amended as of October 30, 1996 to increase the amount available for borrowing
thereunder to $150 million through October 31, 2001. Proceeds of loans may be
used to finance medical group transactions, provide working capital or for other
general corporate uses. At March 31, 1997, the Company had an outstanding
balance of $45 million under the Credit Facility which consisted of multiple
draws with maturities up to 32 days. The Company has classified this facility
as long term due to its ability and intent to renew the obligations through
1998.
Borrowings under the Credit Facility are secured by capital stock of the
Company's subsidiaries and all material contracts, including management service
agreements. At the Company's option, funds may be borrowed at the Base interest
rate or the London Interbank Offer Rate plus a range from .5% to 1.5%
(determined under a specific formula). Interest on amounts outstanding under
Base rate loans is due quarterly while interest on London Interbank Offer Rate
related loans is due upon maturity. The weighted average interest rate
outstanding on draws under the Credit Facility at March 31, 1997 was 6.58%.
The Company is subject to restrictive covenants under the facility, including
the maintenance of certain financial ratios. The agreement limits certain
activities such as additional indebtedness, sales of assets, investments,
-9-
<PAGE>
AMERICAN ONCOLOGY RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
capital expenditures, mergers and consolidations and the payment of dividends.
Under certain circumstances, additional medical practice transactions may
require First Union and the Lenders' consent.
The Company has a $5,000,000 Master Lease Agreement to provide equipment
financing for use in operations. At March 31, 1997, the Company had no
outstanding balance under the Master Lease Agreement.
NOTE 6- EARNINGS PER SHARE
The computation of earnings per share is based on the weighted average number of
Common Stock and Common Stock equivalent shares outstanding during the periods
in accordance with the requirements of the Securities and Exchange Commission
(SEC). All options to purchase Common Stock, shares issued and commitments to
issue Common Stock at specified future dates are assumed to have been
outstanding Common Stock equivalents under the treasury stock method for each of
the periods presented. Fully diluted earnings per share has not been presented
because it does not differ materially from the primary per share computations.
The table summarizes the determination of shares used in per share calculations
(in thousands):
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
1997 1996
------- ------
<S> <C> <C>
Outstanding at end of period:
Common Stock.......................... 27,531 27,746
Common Stock to be issued............. 17,388 15,612
------ ------
44,919 43,358
Effect of weighting and assumed share
equivalents for grants and issuances
at less than the weighted average price 2,473 3,980
------ ------
Shares used in per share calculations... 47,392 47,338
====== ======
</TABLE>
NOTE 7 - SUBSEQUENT EVENTS
In April 1997, the Company amended long-term management agreements to affiliate
with oncology physician groups located in Austin, Texas; Indianapolis, Indiana;
Portland, Oregon and Alexandria, Virginia. Total consideration consisted of cash
and transaction costs of approximately $9,599,000, promissory notes
approximating $5,018,000, contingent promissory notes of $600,000, and 635,154
shares of Common Stock to be delivered at specific future dates as follows:
127,032 in 2000, 127,032 in 2001, and 381,090 in 2002.
NOTE 8 - RECENT PRONOUNCEMENTS
In 1997, Financial Accounting Standards No. 128 ("FAS 128") Earnings Per Share
was issued. FAS 128 is effective for earnings per share calculations for
periods ending after December 15, 1997. At that time, the Company will be
required to change the method currently used to compute earnings per share and
to restate all prior periods.
-10-
<PAGE>
Item 2. AMERICAN ONCOLOGY RESOURCES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
INTRODUCTION
American Oncology Resources, Inc. (the "Company") enters into management
agreements with, and purchases the nonmedical assets of, oncology medical
practices. Under the terms of the management agreements, the Company provides
comprehensive management services to its affiliated oncology practices,
including operational and administrative services, and furnishes personnel,
facilities, supplies and equipment. These practices provide a broad range of
medical services to cancer patients, integrating the specialties of medical
oncology, hematology and radiation oncology. The Company's revenue consists of
management fees and includes all medical practice operating costs for which the
Company is contractually responsible.
In recent years, there has been a trend among oncologists to form larger group
practices that provide a broad range of services to cancer patients in
outpatient settings, rather than in hospitals or other inpatient settings. The
Company believes that the coordinated delivery of comprehensive cancer care in
an outpatient setting offers high quality care that is more cost-effective than
traditional approaches and is increasingly preferred by patients, payors and
physicians. The Company believes that many of these larger oncology practices
recognize the need for outside managerial, financial and business expertise to
more efficiently manage the increasingly complex, burdensome and time-consuming
nonmedical aspects of their practices and that such practices will increasingly
elect to enter into management relationships with entities such as the Company.
The Company's objective is to be the leading national physician practice
management company providing comprehensive services to an integrated network of
affiliated oncology practices. The Company intends to achieve this objective by
(i) focusing exclusively on oncology, (ii) affiliating with leading oncology
practices throughout the United States, (iii) expanding each affiliated oncology
group's presence in its market, (iv) assisting affiliated oncology practices in
offering coordinated, comprehensive cancer care and (v) negotiating and
expanding managed care relationships. Based on the Company's success in
expanding its business to date, the Company believes that it has effective
strategies for achieving its objective of becoming the leading national oncology
practice management company.
FORWARD LOOKING STATEMENTS
The statements contained in this report, in addition to historical information,
are forward looking statements based on the Company's current expectations, and
actual results may vary materially. The Company's business and financial results
are subject to various risks and uncertainties, including the Company's
continued ability to enter into affiliations with new physician practices and to
successfully integrate such practices, the results of operations of groups
currently affiliated with the Company, competition, reductions in third party
reimbursement for services rendered by physician groups affiliated with the
Company, health care regulation and other risks generally affecting the health
care industry. Please refer to the Company's 1996 Annual Report on Form 10-K for
a more detailed discussion of such risks and uncertainties. These forward
looking statements are provided as a framework for the Company's results of
operations. The Company does not intend to provide updated information other
than as otherwise required by applicable law.
RESULTS OF OPERATIONS
Since the Company's incorporation in October 1992, it has grown rapidly from
managing six affiliated physicians in one state to 250 affiliated physicians and
35 oncology practices in fifteen states as of March 31, 1997. For the first
quarter of 1997 and 1996, only one of the Company's affiliated physician groups
contributed more than 10% of the Company's revenue which was 10% and 11%,
respectively, of total revenue. For the first quarter of 1997, the payor mix
of the affiliated physician groups' medical practice revenue, expressed as a
percentage, was 33% for Medicare and Medicaid, 46% for managed care and 21% for
private insurance and other payors. For the first quarter of 1996, the payor
mix of the affiliated physician groups' medical practice revenue, expressed as a
percentage, was 34% for Medicare and Medicaid, 45% for managed care, and 21% for
private insurance and other payors. Because of the number of physician groups
with which the Company has recently affiliated and the different payor mix of
each affiliated physician group, meaningful year-to-year payor trends cannot yet
be identified.
-11-
<PAGE>
Item 2. AMERICAN ONCOLOGY RESOURCES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following table sets forth the percentages of revenue represented by certain
items reflected in the Company's Statement of Operations. The information that
follows should be read in conjunction with the Company's unaudited condensed
consolidated financial statements and notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
1997 1996
------------ ------------
<S> <C> <C>
Revenue.............................. 100.0% 100.0%
----- -----
Operating expenses:..................
Pharmaceuticals and supplies........ 45.7 36.7
Practice compensation and benefits.. 19.1 20.5
Other practice costs................ 10.9 12.3
General and administrative.......... 5.9 7.1
Depreciation and amortization....... 4.3 4.7
Net interest expense................. 2.4 1.1
----- -----
Income before income taxes........... 11.7 17.6
Income taxes......................... 4.5 6.7
----- -----
Net income (loss).................... 7.2% 10.9%
===== =====
</TABLE>
1997 COMPARED TO 1996
The Company amended management agreements to affiliate with four oncology
practices in the first quarter of 1997 and entered into new management
agreements with three oncology practices in the first quarter of 1996. The
results of the new affiliated oncology practices are included in the Company's
operating results from the dates of affiliation. Changes in results of
operations from the first quarter of 1996 to the first quarter of 1997 were
caused, in part, by affiliations with these oncology practices.
Revenue. Revenue for the first quarter of 1997 increased $29.6 million or 73%
over the comparable period of the prior year. Of the increase in first quarter
revenue, $11.7 million was attributable to the addition of ten new oncology
practices with whom the Company entered into new management agreements after
March 31, 1996. The remaining increase in revenue of $17.9 million for the
first quarter of 1997 was attributable to the increase in medical practice
revenue for affiliated physician practices with whom the Company entered into
management agreements prior to March 31, 1996. Revenue for markets under
management in the first quarter of 1996 and 1997 increased 45% over the same
period from the prior year. The methodology for calculating same market growth
is a change from the same practice growth disclosed in prior periods. The
Company changed the methodology to more accurately reflect the revenue growth
for a market from period to period as well as the changing structure of new
physician transactions in 1997. Under the new method, revenue growth for all
practices within a metropolitan service area in which the Company has operations
in both periods is treated as same market growth. Under the old methodology,
the same practice growth for the first quarter of 1997 over the comparable
period in 1996 would have been a 34% increase in revenue. The growth in
practice revenue resulted from the recruitment of new physicians, expansion of
services, affiliation with new physician groups, increases in patient volume
and, to a lesser extent, price adjustments for certain physician services.
Pharmaceuticals and Supplies. Pharmaceuticals and supplies, which include
drugs, medications and other supplies used by the affiliated physician
practices, for the first quarter ended March 31, 1997 increased $17.2 million or
115% over the comparable prior year peiod. Of this increase, $6.1 million was
attributable to the addition of ten new oncology practices with whom the Company
entered into new management agreements after March 31, 1996. The remaining
increase is principally the result of the expansion of services and increase in
patient volume of practices with whom the Company entered into management
agreements prior to March 31, 1996. As a percentage of revenue, pharmaceuticals
and supplies increased to 45.7% in the first quarter of 1997
-12-
<PAGE>
Item 2. AMERICAN ONCOLOGY RESOURCES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
from 36.7% in the first quarter of 1996. This increase was primarily due to a
shift in the revenue mix to a higher percentage of drug revenue, the
introduction of a number of new chemotherapy agents and, to a lesser extent,
lower reimbursement from payors. Management expects that third-party payors will
continue to negotiate medical services, pharmaceuticals (including chemotherapy
drugs) and other supplies, with the goal of lowering reimbursement and
utilization rates, and that such lower reimbursement and utilization rates as
well as shifts in revenue mix may continue to reduce the Company's margins with
respect to such items. The Company has adopted a number of strategies to address
this matter, including initiating preferred pharmaceutical relationships.
Practice Compensation and Benefits. Practice compensation and benefits, which
include the salaries, wages and benefits of the employees of the affiliated
physician practices (excluding affiliated oncologists) and the employees of the
Company who are located at the affiliated physician practice sites, for the
first quarter of 1997 increased $5.1 million or 61% over the comparable prior
year period. Of the increase for the first quarter of 1997, $2.1 million was
attributable to the addition of ten affiliated oncology practices with whom the
Company entered into new management agreements after March 31, 1996. As a
percentage of revenue, practice compensation and benefits decreased to 19.1% in
the first quarter of 1997 from 20.5% in the first quarter of 1996. Decreases in
practice compensation and benefit costs as a percentage of revenue resulted from
economies of scale.
Other Practice Costs. Other practice costs, which consist of rent, utilities,
repairs and maintenance, insurance and other direct practice costs, for the
first quarter of 1997 increased $2.7 million or 53% over the comparable prior
year period. Of the increase for the three months ended March 31, 1997, $0.9
million was attributable to the addition of ten affiliated oncology practices
with whom the Company entered into new management agreements after March 31,
1996. As a percentage of revenue, other practice costs decreased to 10.9% in
the first quarter of 1997 as compared to 12.3% in the same period in 1996.
Decreases in other practice costs as a percentage of revenue resulted from
economies of scale.
General and Administrative. General corporate expenses for the first quarter
ended March 31, 1997 increased $1.3 million or 45% over the comparable prior
year period. This increase was primarily attributable to the addition of
personnel and greater support costs associated with the Company's rapid growth
since March 31, 1996. As a percentage of revenue, general and administrative
expenses decreased to 5.9% in the first quarter of 1997 from 7.1% in the first
quarter of 1996, primarily as a result of economies of scale.
Depreciation and Amortization. Depreciation and amortization expenses for the
quarter ended March 31, 1997 increased $1.1 million or 60% over the comparable
prior year period. This increase was primarily the result of amortization of
intangible assets associated with the Company's entering into new and amending
existing management agreements with physician groups.
Interest. Net interest expense increased to $1.6 million for the first
quarter of 1997 from $0.5 million in the same period of 1996. The increase was
primarily attributable to interest expense on borrowings used to fund cash
consideration and physician debt issued for seventeen medical practice
transactions, including both new and amendments to existing management
agreements, since March 31, 1996. In the future, management expects that net
interest expense as a percentage of revenue will increase slightly due to
anticipated debt related to medical practice transactions and the development of
integrated cancer centers.
Income Taxes. For the first quarter of 1997 and 1996, the Company recognized a
tax provision of $3.2 million and $2.7 million, respectively, at estimated
annual effective rates of 38.5% and 38.0%, respectively. The effective annual
tax rates represent management's best estimate of the tax provision based on the
existing state revenue mix.
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<PAGE>
Item 2. AMERICAN ONCOLOGY RESOURCES, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
The Company requires capital primarily to enter into new or amended management
agreements with, and to purchase the nonmedical assets of, oncology medical
practices. During the quarter ended March 31, 1997, the Company paid total
consideration of $29.4 million for the affiliation of four oncology practices
through amending existing management agreements, including cash and transaction
costs of $13.9 million. During the comparable period of the prior year, the
Company paid $31.3 million for management agreements with physician groups
including cash and transaction costs of $19.4 million.
To fund this rapid growth and development, the Company has satisfied its
transaction and working capital needs through a recapitalization, private debt
and equity financings, and borrowings under a $150 million syndicated revolving
Credit Facility with First Union. The Company has relied primarily on
management fees received from its affiliated physician practices to fund
operations. Cash derived from operations was $12.4 million for the first
quarter of 1997, while cash used in operations in the comparable period of 1996
was $1.5 million. The increase is due primarily to the operations of the
oncology practices with whom the Company has affiliated since March 31, 1996,
and the effect of the reversal of the accelerated payments made in December 1996
to the affiliated physician groups.
During the first quarter of 1997, the Company borrowed $32 million under the
Credit Facility to fund medical practice transactions and the purchase of
treasury stock. Of the 1997 borrowings, $10 million was repaid during the
quarter. Borrowings under the Credit Facility bear interest at a rate equal to
a rate based on prime rate or the London Interbank Offer Rate, based on a
defined formula. The Credit Facility contains affirmative and negative
covenants, including the maintenance of certain financial ratios, restrictions
on sales, leases or other dispositions of property, restrictions on other
indebtedness and prohibitions on the payment of dividends. The Company's
management service agreements, its equity ownership in its subsidiaries and all
other securities owned by the Company (other than treasury shares of the
Company) are pledged as security under the Credit Facility. The Company is
currently in compliance with the Credit Facility covenants.
At March 31, 1997, the Company had working capital of $48.0 million and cash
and cash equivalents of $8.6 million. The Company also had $39.5 million of
current liabilities, including approximately $5.2 million of short term notes
payable and long-term indebtedness maturing before March 31, 1998. The Company
currently expects that its principal use of funds in the near future will be in
connection with anticipated transactions with affiliated physician groups, the
purchase of medical equipment and the acquisition of real estate for the
development of integrated cancer centers. The Company expects that the existing
cash and investment balances, cash generated from operations and amounts
available under the Credit Facility will be adequate to satisfy the Company's
cash requirements for the next 12 months.
-14-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
AMERICAN ONCOLOGY RESOURCES, INC.
(a) Exhibits
Exhibit
Number Description
------ -----------
3.1 Articles of Incorporation, as amended
3.2 By-Laws, as amended
11 Statement Re - Computation of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any Reports on Form 8-K during the quarter ended
March 31, 1997.
-15-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 12, 1997 AMERICAN ONCOLOGY RESOURCES, INC.
By: /s/ R. DALE ROSS
---------------------
R. Dale Ross, Chairman of the Board
and Chief Executive Officer
By: /s/ L. FRED POUNDS
-----------------------
L. Fred Pounds, Vice President of Finance
and Chief Financial Officer
-16-
<PAGE>
AMERICAN ONCOLOGY RESOURCES, INC.
EXHIBIT INDEX
Exhibit Number Description of Exhibits
- -------------- -----------------------
3.1 Articles of Incorporation, as amended
3.2 By-Laws, as amended
11 Statement Re - Computation of Per Share Earnings
27 Financial Data Schedule
-17-
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
ASCEND MEDICAL CORP.
THE UNDERSIGNED, for the purpose of forming a corporation pursuant to the
provisions of the General Corporation Law of Delaware, does hereby certify as
follows:
FIRST: The name of the Corporation is Ascend Medical Corp.
SECOND: The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, Wilmington, New Castle County. The name of the
Corporation's registered agent at such address is The Corporation Trust Company.
THIRD: The purpose or the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is two million (2,000,000) shares, divided into two
classes consisting of one million (1,000,000) Preferred Shares, and the other
class consisting of one million (1,000,000) Common Shares, each or which shall
have the par value of $.01 per share.
The Board of Directors or the Corporation shall have the power by
resolution to (a) provide for the issuance of shares of preferred stock in
series, (b) determine the number of shares of such stock in such series, and (c)
fix the designations, preferences, qualifications, limitations, restrictions and
special or relative rights of shares of preferred stock or any series thereof.
FIFTH: The name and mailing address of the incorporator is as follow:
Name Mailing Address
---- ---------------
Kyle M. Fink, M.D. c/o HOA
2005 Franklin Street
Suite 150
Denver, Colorado 80205
1
<PAGE>
SIXTH: In furtherance and not in limitation of the general powers
conferred by the laws of the State of Delaware, the Board of Directors is
expressly authorized to make, alter or repeal the Bylaws of the Corporation,
except as specifically otherwise provided therein.
SEVENTH: A director of the Corporation shall have no personal liability to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except to the extent that Section 102(b)(7) (or any successor
provision) of the Delaware General Corporation Law, as amended from time to
time, expressly provides that the liability of a director not be eliminated or
limited.
EIGHTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders or this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be
2
<PAGE>
binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders of this Corporation as the case may be,
and also on this Corporation.
NINTH: The term of existence of the Corporation shall be perpetual.
TENTH: Any director or the entire Board of Directors may be removed, with
or without cause, by the holders of a majority of the shares entitled to vote at
an election of directors.
IN WITNESS WHEREOF, the undersigned, being the incorporator hereinabove
named, does hereby execute this Certificate of Incorporation this 30th day of
October, 1992.
/s/ Kyle M. Fink, M.D.
--------------------------------
Kyle M. Fink, M.D., Incorporator
3
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ASCEND MEDICAL CORP.
Ascend Medical Corp., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify:
FIRST: That the Sole Director of the corporation, by written consent,
filed with the minutes of the Board, adopted a resolution proposing and
declaring advisable the following amendment to the Certificate of Incorporation
of the corporation:
RESOLVED, that the amendment of Article FIRST of the Corporation's
Certificate of Incorporation to read in its entirety as follows (the
"Amendment") is hereby proposed and declared to be advisable and in the
best interests of the Corporation:
"FIRST, the name of the corporation is AMERICAN ONCOLOGY RESOURCES,
INC."
SECOND: That the sole stockholder has given a written consent to said
amendment in accordance with the provisions of Section 228 of the General
Corporation Law of the State of Delaware.
THIRD: That the amendment has been duly adopted in accordance with the
provisions of Section 242 and 228 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the corporation has caused its corporate seal to be
hereunto affixed and this certificate to be signed by its President and attested
by its Secretary, this 10th day of November, 1992.
ASCEND MEDICAL CORP.
By:/s/ Kyle M. Fink, M.D.
-------------------------------
Kyle M. Fink, M.D., President
4
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
AMERICAN ONCOLOGY RESOURCES, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
AMERICAN ONCOLOGY RESOURCES, INC.
2. The certificate of incorporation of the Corporation is hereby amended
by striking out the first paragraph of the fourth article thereof and by
substituting in lieu of said paragraph the following new paragraph:
"The total number of shares of capital stock which the Corporation
shall have authority to issue is twenty-six million (26,000,000)
shares, consisting of one million (1,000,000) shares of preferred
stock, par value $.01 per share, and twenty-five million (25,000,000)
shares of common stock, par value $.01 per share."
3. The amendment of the certificate of incorporation herein certified has
been duly adopted in accordance with the provisions of Section 228 and 242 of
the General Corporation Law of the State of Delaware. The holders of a majority
of outstanding stock entitled to vote thereon, by written consent in accordance
with the provisions of Section 228 of the General Corporation Law of the State
of Delaware, voted in favor of the amendment. Prompt written notice of the
adoption of the amendment herein certified has been given to those stockholders
who have not consented in writing thereto, as provided in Section 228 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by its Chairman of the Board and Chief Executive Officer and attested to
by its Secretary, this 9th day of March, 1994.
AMERICAN ONCOLOGY RESOURCES, INC.
By:/s/ R. Dale Ross
--------------------------------------------
R. Dale Ross, Chairman of the Board and
Chief Executive Officer
ATTEST:
/s/ Leo E. Sands
- -----------------------
Leo E. Sands, Secretary
5
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
AMERICAN ONCOLOGY RESOURCES, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
AMERICAN ONCOLOGY RESOURCES, INC.
2. The certificate of incorporation of the Corporation is hereby amended
by striking out the first paragraph of the fourth article thereof and by
substituting in lieu of said paragraph the following new paragraph:
"The total number of shares of capital stock which the Corporation
shall have authority to issue is forty-one million (41,000,000)
shares, consisting of one million (1,000,000) shares of preferred
stock, par value $.01 per share, and forty million (40,000,000) shares
of common stock, par value $.01 per share."
3. The amendment of the certificate of incorporation herein certified has
been duly adopted in accordance with the provisions of Section 228 and 242 of
the General Corporation Law of the State of Delaware. The holders of a majority
of outstanding stock entitled to vote thereon, by written consent in accordance
with the provisions of Section 228 of the General Corporation Law of the State
of Delaware, voted in favor of the amendment. Prompt written notice of the
adoption of the amendment herein certified has been given to those stockholders
who have not consented in writing thereto, as provided in Section 228 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by its Chairman of the Board and Chief Executive Officer and attested to
by its Secretary, this 2nd day of May, 1995.
AMERICAN ONCOLOGY RESOURCES, INC.
By:/s/ R. Dale Ross
-------------------------------------------
R. Dale Ross, Chairman of the Board and
Chief Executive Officer
ATTEST:
/s/ Leo E. Sands
- -----------------------
Leo E. Sands, Secretary
6
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
AMERICAN ONCOLOGY RESOURCES, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
AMERICAN ONCOLOGY RESOURCES, INC.
2. The certificate of incorporation of the Corporation is hereby amended
by striking out the first paragraph of the fourth article thereof and by
substituting in lieu of said paragraph the following new paragraph:
"The total number of shares of capital stock which the Corporation
shall have authority to issue is sixty-one million (61,000,000)
shares, consisting of one million (1,000,000) shares of preferred
stock, par value $.01 per share, and sixty million (60,000,000) shares
of common stock, par value $.01 per share."
3. The amendment of the certificate of incorporation herein certified has
been duly adopted in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware; the amendment was duly adopted
by resolution of the Board of Directors on February 8, 1996, and the necessary
shares as required by statute were voted in favor of the amendment of the Annual
Meeting of Stockholders held on May 9, 1996.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by its Chairman of the Board and Chief Executive Officer and attested to
by its Secretary, this 9th day of May, 1996.
AMERICAN ONCOLOGY RESOURCES, INC.
By:/s/ R. Dale Ross
-------------------------------------------
R. Dale Ross, Chairman of the Board and
Chief Executive Officer
ATTEST:
/s/ Leo E. Sands
- -----------------------
Leo E. Sands, Secretary
7
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
AMERICAN ONCOLOGY RESOURCES, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
AMERICAN ONCOLOGY RESOURCES, INC.
2. The certificate of incorporation of the Corporation is hereby amended
by striking out the first paragraph of the fourth article thereof and by
substituting in lieu of said paragraph the following new paragraph:
"The total number of shares of capital stock which the Corporation
shall have authority to issue is eighty-one million (81,000,000)
shares, consisting of one million (1,000,000) shares of preferred
stock, par value $.01 per share, and eighty million (80,000,000)
shares of common stock, par value $.01 per share."
3. The amendment of the certificate of incorporation herein certified has
been duly adopted in accordance with the provisions of Section 242 of the
General Corporation Law of the State of Delaware; the amendment was duly adopted
by resolution of the Board of Directors on February 8, 1997, and the necessary
shares as required by statute were voted in favor of the amendment of the Annual
Meeting of Stockholders held on May 8, 1997.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by its Chairman of the Board and Chief Executive Officer and attested to
by its Secretary, this 8th day of May, 1997.
AMERICAN ONCOLOGY RESOURCES, INC.
By: /s/ R. Dale Ross
-------------------------------------------
R. Dale Ross, Chairman of the Board and
Chief Executive Officer
ATTEST:
/s/ Leo E. Sands
- -----------------------
Leo E. Sands, Secretary
8
<PAGE>
EXHIBIT 3.2
BYLAWS
------
OF
ASCEND MEDICAL CORP.
(A DELAWARE CORPORATION)
ARTICLE 1
OFFICES
Section 1.01. Offices. The Corporation may have offices at such places
both within and without the State of Delaware as the Board of Directors may from
time to time determine or the business of the Corporation may require.
ARTICLE 2
MEETINGS OF STOCKHOLDERS
Section 2.01. Place of Meeting. Meetings of the stockholders shall be
held at such place, within the State of Delaware or elsewhere, as may be fixed
from time to time by the Board of Directors. If no place is so fixed for a
meeting, it shall be held at the Corporation's then principal executive office.
Section 2.02. Annual Meeting. The annual meeting of stockholders shall
be held, unless the Board of Directors shall fix some other hour or date
therefor, at 11:00 o'clock A.M. on the third Monday of April in each year, if
not a legal holiday under the laws of Delaware, and, if a legal holiday, then on
the next succeeding secular day not a legal holiday under the laws of Delaware,
at which the stockholders shall elect by plurality vote a Board of Directors,
and transact such other business as may properly be brought before the meeting.
Section 2.03. Notice of Annual Meetings. Written notice of the annual
meeting stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than 10 days nor more
than 60 days before the date of the meeting.
Section 2.04. List of Stockholders. The officer who has charge of the
stock ledger of the Corporation shall prepare and make, at least 10 days before
every meeting of stockholders, a complete list of stockholders entitled to vote
at the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, either at a place within the city where the
<PAGE>
meeting is to be held, which place shall be so specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 2.05. Special Meetings. Special meetings of the stockholders,
for any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the Chairman of the Board or the
President and shall be called by the President or Secretary at the request in
writing of a majority of the Board of Directors. Such request shall state the
purpose or purposes of the proposed meeting. Business transacted at any special
meeting of stockholders shall be limited to the purposes stated in the notice.
Section 2.06. Notice of Special Meetings. Written notice of a special
meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given to each stockholder
entitled to vote at such meeting not less than 10 days nor more than 60 days
before the date of the meeting.
Section 2.07. Quorum; Voting. The holders of a majority of the stock
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute or by the Certificate of Incorporation. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally notified. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting. When a quorum is present
at any meeting, except for elections of directors, which shall be decided by
plurality vote, the vote of the holders of a majority of the stock having voting
power present in person or represented by proxy shall decide any question
brought before such meeting, unless the question is one upon which by express
provision of statute or of the Certificate of Incorporation, a different vote is
required, in which case such express provision shall govern and control the
decision of such question. Unless otherwise provided in the Certificate of
Incorporation, each stockholder shall at every meeting of
-2-
<PAGE>
stockholders be entitled to one vote in person or by proxy for each share of the
capital stock having voting power held by such stockholder, but no shares shall
be voted pursuant to a proxy more than three (3) years after the date of the
proxy unless the proxy provides for a longer period.
Section 2.08. Action Without a Meeting. Unless otherwise restricted by
the Certificate of Incorporation, any action required or permitted to be taken
at any annual or special meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent or consents in writing
setting forth the action so taken shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted and shall be delivered to the Corporation by
delivery to its registered office in the State, its principal place of business,
or an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. Every written consent shall bear the date of
signature of each stockholder who signs the consent and no written consent shall
be effective to take the corporate action referred to therein unless, within
sixty days after the earliest dated consent delivered in the manner required by
this Section to the Corporation, written consents signed by a sufficient number
of stockholders to take action are delivered in the manner required by this
Section to the Corporation. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE 3
DIRECTORS
Section 3.01. Number and Term of Office. The number of directors of
the Corporation shall be such number as shall be designated from time to time by
resolution of the Board of Directors and initially shall be one. The directors
shall be elected at the annual meeting of the stockholders, except as provided
in Section 3.02 hereof. Each director elected shall hold office for a term of
one year and shall serve until his successor is elected and qualified or until
his earlier death, resignation or removal. Directors need not be stockholders.
Section 3.02. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected
-3-
<PAGE>
and shall qualify, unless sooner displaced. If there are no directors in
office, then an election of directors may be held in the manner provided by
statute. If, at the time of filling any vacancy or any newly created
directorship, the directors then in office shall constitute less than a
majority of the whole board (as constituted immediately prior to any such
increase), the Court of Chancery may, upon application of any stockholder or
stockholders holding at least 10 percent of the total number of the shares at
the time outstanding having the right to vote for such directors, summarily
order an election to be held to fill any such vacancies or newly created
directorships, or to replace the directors chosen by the directors then in
office.
Section 3.03. Resignations. Any director may resign at any time by
giving written notice to the Board of Directors, the Chairman of the Board, if
there is one, the President, or the Secretary. Such resignation shall take
effect at the time of receipt thereof or at any later time specified therein;
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 3.04. Direction of Management. The business of the Corporation
shall be managed under the direction of its Board of Directors, which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
Bylaws directed or required to be exercised or done by the stockholders.
Section 3.05. Place of Meetings. The Board of Directors of the
Corporation may hold meetings, both regular and special, either within or
without the State of Delaware.
Section 3.06. Annual Meeting. Immediately after each annual election
of directors, the Board of Directors shall meet for the purpose of organization,
election of officers, and the transaction of other business, at the place where
such election of directors was held or, if notice of such meeting is given, at
the place specified in such notice. Notice of such meeting need not be given.
In the absence of a quorum at said meeting, the same may be held at any other
time and place which shall be specified in a notice given as hereinafter
provided for special meetings of the Board of Directors, or as shall be
specified in a written waiver signed by the directors, if any, not attending and
participating in the meeting.
Section 3.07. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and place as shall from time
to time be determined by the Board.
Section 3.08. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board, if there is one, or the
President on two (2) days' notice
-4-
<PAGE>
to each director; either personally (including telephone), or in the manner
specified in Section 4.01; special meetings shall be called by the Chairman of
the Board, if there is one, or the President or the Secretary in like manner and
on like notice on the written request of two (2) directors.
Section 3.09. Quorum; Voting. At all meetings of the Board, a majority
of the directors shall constitute a quorum for the transaction of business; and
at all meetings of any committee of the Board, a majority of the members of such
committee shall constitute a quorum for the transaction of business. The act of
a majority of the directors present at any meeting of the Board of Directors or
any committee thereof at which there is a quorum present shall be the act of the
Board of Directors or such committee, as the case may be, except as may be
otherwise specifically provided by statute or by the Certificate of
Incorporation. If a quorum shall not be present at any meeting of the Board of
Directors or committee thereof, the directors present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 3.10. Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.
Section 3.11. Participation in Meetings. One or more directors may
participate in any meeting of the Board or committee thereof by means of
conference telephone or similar communications equipment by which all persons
participating can hear each other.
Section 3.12. Committees of Directors. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. Any such committee, to the extent provided in the
resolution, shall have and may exercise all of the powers and authority of the
Board of Directors and may authorize the seal of the Corporation to be affixed
to all papers which may require it, but no such committee shall have the power
or authority in reference to amending the Certificate of Incorporation (except
that a committee may, to the extent authorized in the resolution providing for
the issuance of shares of stock adopted by the Board of Directors, fix any
preferences or rights of such shares relating to dividends, redemption,
-5-
<PAGE>
dissolution, any distribution of assets of the Corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
Corporation), adopting an agreement of merger or consolidation, recommending to
the stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution, or amending the
Bylaws of the Corporation; and, unless the resolution expressly so provides, no
such committee shall have the power or authority to declare a dividend, to
authorize the issuance of stock, or to adopt a certificate of ownership and
merger. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
Each committee shall keep regular minutes of its meetings and report the same to
the Board of Directors when requested.
Section 3.13. Compensation of Directors. Each director shall be
entitled to receive such compensation, if any, as may from time to time be fixed
by the Board of Directors. Members of special or standing committees may be
allowed like compensation for attending committee meetings. Directors may also
be reimbursed by the Corporation for all reasonable expenses incurred in
traveling to and from the place of each meeting of the Board or of any such
committee or otherwise incurred in the performance of their duties as directors.
No payment referred to herein shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
ARTICLE 4
NOTICES
Section 4.01. Notices. Whenever, under the provisions of law or of the
Certificate of Incorporation or of these Bylaws, notice is required to be given
to any director or stockholder, such requirement shall not be construed to
necessitate personal notice. Such notice may in every instance be effectively
given by depositing a writing in a post office or letter box, in a postpaid,
sealed wrapper, or by dispatching a prepaid telegram, cable, telecopy or telex
or by delivering a writing in a sealed wrapper prepaid to a courier service
guaranteeing delivery within 2 business days, in each case addressed to such
director or stockholder, at his address as it appears on the records of the
Corporation in the case of a stockholder and at his business address (unless he
shall have filed a written request with the Secretary that notices be directed
to a different address) in the case of a director. Such notice shall be deemed
to be given at the time it is so dispatched.
Section 4.02. Waiver of Notice. Whenever, under the provisions of law
or of the Certificate of Incorporation or of
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<PAGE>
these Bylaws, notice is required to be given, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time of the event for which notice is to be given, shall be deemed
equivalent thereto. Neither the business nor the purpose of any meeting need be
specified in such a waiver.
ARTICLE 5
OFFICERS
Section 5.01. Number. The officers of the Corporation shall be a
President, a Secretary and a Treasurer, and may also include a Chairman of the
Board, one or more Vice Presidents, one or more Assistant Secretaries and
Assistant Treasurers, and such other officers as may be elected by the Board of
Directors. Any number of offices may be held by the same person.
Section 5.02. Election and Term of Office. The officers of the
Corporation shall be elected by the Board of Directors. Officers shall hold
office at the pleasure of the Board.
Section 5.03. Removal. Any officer may be removed at any time by the
Board of Directors. Any vacancy occurring in any office of the Corporation may
be filled by the Board of Directors.
Section 5.04. Chairman of the Board. The Chairman of the Board, if
there is one, shall preside at all meetings of the Board of Directors and shall
perform such other duties, if any, as may be specified by the Board from time to
time.
Section 5.05. President. The President shall be the chief executive
officer of the Corporation and shall have overall responsibility for the
management of the business and operations of the Corporation and shall see that
all orders and resolutions of the Board are carried into effect. In the absence
of the Chairman of the Board he shall preside over meetings of the Board of
Directors. In general, he shall perform all duties incident to the office of
President, and such other duties as from time to time may be assigned to him by
the Board.
Section 5.06. Vice Presidents. The Vice Presidents shall perform such
duties and have such authority as may be specified in these Bylaws or by the
Board of Directors or the President. In the absence or disability of the
President, the Vice Presidents, in order of seniority established by the Board
of Directors or the President, shall perform the duties and exercise the powers
of the President.
Section 5.07. Secretary. The Secretary shall attend all meetings of
the Board of Directors and all meetings of the
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<PAGE>
stockholders and record all the proceedings of the meetings of the stockholders
and of the Board of Directors in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. He shall give,
or cause to be given, notice of all meetings of the stockholders and special
meetings of the Board of Directors, and shall perform such other duties as may
be prescribed by the Board of Directors or the President. He shall have custody
of the corporate seal of the Corporation and he, or an Assistant Secretary,
shall have authority to affix the same to any instrument, and when so affixed it
may be attested by his signature or by the signature of such Assistant
Secretary. The Board of Directors may give general authority to any other
officer to affix the seal of the Corporation and to attest the affixing by his
signature.
Section 5.08. Assistant Secretaries. The Assistant Secretary or
Secretaries shall, in the absence or disability of the Secretary, perform the
duties and exercise the authority of the Secretary and shall perform such other
duties and have such other authority as the Board of Directors or the President
may from time to time prescribe.
Section 5.09. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors or the President or the Chief Financial Officer, taking
proper vouchers for such disbursements, and shall render to the Board of
Directors when the Board so requires, an account of all his transactions as
Treasurer and of the financial condition of the Corporation.
Section 5.10. Assistant Treasurers. The Assistant Treasurer or
Treasurers shall, in the absence or disability of the Treasurer, perform the
duties and exercise the authority of the Treasurer and shall perform such other
duties and have such other authority as the Board of Directors may from time to
time prescribe.
ARTICLE 6
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 6.01. Indemnification. Any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that such person is or was a director or officer of the
Corporation, or is or was serving while a director or officer of
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<PAGE>
the Corporation at the request of the Corporation as a director, officer,
employee, agent, fiduciary or other representative of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
shall be indemnified by the Corporation against expenses (including attorneys'
fees), judgments, fines, excise taxes and amounts paid in settlement actually
and reasonably incurred by such person in connection with such action, suit or
proceeding to the full extent permissible under Delaware law.
Section 6.02. Advances. Any person claiming indemnification within the
scope of Section 6.01 shall be entitled to advances from the Corporation for
payment of the expenses of defending actions against such person in the manner
and to the full extent permissible under Delaware law.
Section 6.03. Procedure. On the request of any person requesting
indemnification under Section 6.01, the Board of Directors or a committee
thereof shall determine whether such indemnification is permissible or such
determination shall be made by independent legal counsel if the Board or
committee so directs or if the Board or committee is not empowered by statute to
make such determination.
Section 6.04. Other Rights. The indemnification and advancement of
expenses provided by this Article 6 shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any insurance or other agreement, vote of shareholders or
disinterested directors or otherwise, both as to actions in their official
capacity and as to actions in another capacity while holding an office, and
shall continue as to a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors and administrators of such
person.
Section 6.05. Insurance. The Corporation shall have power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee, agent, fiduciary or
other representative of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
him against such liability under the provisions of these Bylaws.
Section 6.06. Modification. The duties of the Corporation to indemnify
and to advance expenses to a director or officer provided in this Article 6
shall be in the nature of a contract between the Corporation and each such
director or officer, and no amendment or repeal of any provision of this
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<PAGE>
Article 6 shall alter, to the detriment of such director or officer, the right
of such person to the advancement of expenses or indemnification related to a
claim based on an act or failure to act which took place prior to such
amendment, repeal or termination.
ARTICLE 7
CERTIFICATES OF STOCK
Section 7.01. Stock Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate in the form prescribed by
the Board of Directors signed on behalf of the Corporation by the Chairman of
the Board or the President or a Vice President and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
Corporation, representing the number of shares owned by him in the Corporation.
Any or all signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if such person were such officer,
transfer agent, or registrar at the date of issue.
Section 7.02. Lost Certificates. The Board of Directors may direct a
new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 7.03. Transfers of Stock. Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 7.04. Fixing Record Date. The Board of Directors of the
Corporation may fix a record date for the purpose of determining the
stockholders entitled to notice of, or
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<PAGE>
to vote at, any meeting of stockholders or any adjournment thereof, or to
consent to corporate action in writing without a meeting, or to receive payment
of any dividend or other distribution or allotment of any rights, or to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action. Such record date shall not precede
the date upon which the resolution fixing the record date is adopted by the
Board of Directors and such record date shall not be (i) in the case of such a
meeting of stockholders, more than 60 nor less than 10 days before the date of
the meeting of stockholders, or (ii) in the case of consents in writing without
a meeting, more than 10 days after the date upon which the resolution fixing the
record date is adopted by the Board of Directors, or (iii) in other cases, more
than 60 days prior to the payment or allotment or change, conversion or exchange
or other action. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting unless the Board of Directors fixes a new record date for the adjourned
meeting.
Section 7.05. Registered Stockholders. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of stock to receive dividends and to vote as such owner, and shall be
entitled to hold liable for calls and assessments a person registered on its
books as the owner of stock, and shall not be bound to recognize any equitable
or other claim to, or interest in, such stock on the part of any other person,
whether or not it shall have express or other notice thereof, except as
otherwise provided by the laws of Delaware.
ARTICLE 8
AMENDMENTS
Section 8.01. Amendments. These Bylaws may be altered, amended or
repealed, and new Bylaws may be adopted, by the stockholders or by the Board of
Directors at any regular meeting of the stockholders or of the Board of
Directors or at any special meeting of the stockholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new
Bylaws be contained in the notice of such special meeting.
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<PAGE>
AMENDMENT TO BYLAWS
OF
AMERICAN ONCOLOGY RESOURCES, INC.
RESOLVED, that, pursuant to Section 8.01 of the Company's bylaws, Section
2.02 of the Company's bylaws is amended in its entirety to read as follows:
"The annual meeting of stockholders for the election of directors and for
the transaction of such other business as may properly come before the
meeting shall be held on such date, and at such time and place, within or
without the State of Delaware, as shall be designated from time to time by
the Board of Directors. Failure to hold any annual meeting of stockholders
shall not work a forfeiture or dissolution of the Company."
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<PAGE>
AMENDMENT TO BYLAWS
OF
AMERICAN ONCOLOGY RESOURCES, INC.
RESOLVED, that, pursuant to Section 8.01 of the Company's bylaws, Article 5
of the Company's bylaws is amended in its entirety to read as follows:
ARTICLE 5
OFFICERS
Section 5.01. Number. The officers of the Corporation shall be a Chief
Executive Officer, President, Chief Operating Officer, Chief Financial Officer,
Secretary and Treasurer, and may also include a Chairman of the Board, one or
more Vice Presidents, one or more Assistant Secretaries and Assistant
Treasurers, and such other officers as may be elected by the Board of Directors.
Any number of offices may be held by the same person.
Section 5.02. Election and Term of Office. The officers of the
Corporation shall be elected by the Board of Directors. Officers shall hold
office at the pleasure of the Board of Directors.
Section 5.03. Removal. Any officer may be removed at any time by the
Board of Directors. Any vacancy occurring in any office of the Corporation may
be filled by the Board of Directors.
Section 5.04. Chairman of the Board. The Chairman of the Board, if
there is one, shall preside at all meetings of the Board of Directors and shall
perform such other duties, if any, as may be specified by the Board from time to
time.
Section 5.05. Chief Executive Officer. The Chief Executive Officer of
the Corporation shall be the chief executive officer of the Corporation, shall
have general direction of the business and affairs of the Corporation and
general supervision over its several officers, subject, however, to the control
of the Board of Directors, and shall see that all orders and resolutions of the
Board of Directors are carried into effect. The Chief Executive Officer may
sign, with the Secretary or Assistant Secretary, certificates representing
shares of stock of the Corporation. The Chief Executive Officer shall perform
all duties incident to the office of the Chief Executive Officer and such other
duties as from time to time may be assigned to him by the Board of Directors or
as prescribed by these Bylaws.
Section 5.06. President. The President shall in the absence of the
Chief Executive Officer perform the duties and exercise the power of the Chief
Executive Officer and shall perform such other duties and have such other powers
as the Board of Directors or the Chief Executive Officer may from time to time
prescribe. The President may sign, with the Secretary or Assistant Secretary,
certificates representing shares of stock of the Corporation.
Section 5.07. Chief Operating Officer. The Chief Operating Officer
shall be the chief operating officer and shall have such other powers as the
Board of Directors or the Chief Executive Officer may from time to time
prescribe. In the absence of the Chief Executive Officer and President, the
Chief Operating Officer shall have the duties and exercise the powers of the
Chief Executive Officer.
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<PAGE>
Section 5.08. Chief Financial Officer. The Chief Financial Officer of
the Corporation shall be the chief financial officer of the Corporation. The
Chief Financial Officer shall perform such other duties and have such other
powers as the Board of Directors or the Chief Executive Officer may from time to
time prescribe.
Section 5.09. Vice Presidents. The Vice Presidents shall perform such
duties and have such authority as may be specified in these Bylaws or by the
Board of Directors or the Chief Executive Officer.
Section 5.10. Secretary. The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or the Chief Executive Officer.
Section 5.11. Assistant Secretaries. The Assistant Secretary or
Secretaries shall, in the absence or disability of the Secretary, perform the
duties and exercise the authority of the Secretary and shall perform such other
duties and have such other authority as the Board of Directors or the Chief
Executive Officer may from time to time prescribe.
Section 5.12. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors or the Chief Executive Officer or the Chief Financial
Officer, taking proper vouchers for such disbursements, and shall render to the
Board of Directors when the Board so requires, an account of all his
transactions as Treasurer and of the financial condition of the Corporation.
Section 5.13. Assistant Treasurers. The Assistant Treasurer or
Treasurers shall, in the absence or disability of the Treasurer, perform the
duties and exercise the authority of the Treasurer and shall perform such other
duties and have such other authority as the Board of Directors or the Chief
Executive Officer or the Chief Financial Officer may from time to time
prescribe.
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<PAGE>
Exhibit 11
AMERICAN ONCOLOGY RESOURCES, INC.
STATEMENT RE-COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31,
1997 1996
-------- --------
<S> <C> <C>
NET INCOME.............................. $ 5,072 $ 4,447
OUTSTANDING AT END OF PERIOD:
Shares of Common Stock................ 27,531 27,746
Commitments to issue Common Stock at
specific future dates................ 17,388 15,612
Effect of weighting................... (328) (202)
------- -------
44,591 43,156
Options to purchase Common Stock........ 5,170 5,592
Effect of treasury stock method......... (2,369) (1,410)
------- -------
Total shares used in per share 47,392 47,338
calculation............................ ======= =======
Net income per share.................... $ .11 $ .09
======= =======
ASSUMING FULL DILUTION:
Outstanding per above................. 47,392 47,338
Additional dilution resulting from
use of period end price per
share if higher than average.......... ______ ______
Total shares used in per share
calculation............................ 47,392 47,338
======= =======
Net income per share.................... $ .11 $ .09
======= =======
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 8,551
<SECURITIES> 0
<RECEIVABLES> 72,206
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 87,568
<PP&E> 28,659
<DEPRECIATION> 7,596
<TOTAL-ASSETS> 379,010
<CURRENT-LIABILITIES> 39,523
<BONDS> 0
0
0
<COMMON> 284
<OTHER-SE> 224,738
<TOTAL-LIABILITY-AND-EQUITY> 379,010
<SALES> 0
<TOTAL-REVENUES> 70,396
<CGS> 0
<TOTAL-COSTS> 60,507
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,745
<INCOME-PRETAX> 8,246
<INCOME-TAX> 3,174
<INCOME-CONTINUING> 5,072
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,072
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
